Biggest deal for retailers? Being first to open doors

Target is opening at 4 a.m., so Kohl’s is opening at 3 a.m. Walmart is opening at midnight, so Toys “R” Us is opening at 10 p.m. Thanksgiving evening. It’s the annual race of the retailers to beat the competition to the starting line on Black Friday, and they do it because they believe the early bird will get the lion’s share of the shopper’s dollars.

“The first store a person shops at is usually where they spend the most money,” said Ellen Davis of the National Retail Federation. “If you can bring somebody into a store before they visit any of your competitors, you’ve got an upper hand. That’s why it’s a big deal if you’re opening at 5 a.m. and your competitor is opening at 6 a.m. or 4 a.m. These early hours can be a huge competitive advantage.”

“Everybody’s trying to get a jump on somebody else,” said retail expert C. Britt Beemer, chairman of America’s Research Group, which conducts weekly surveys of shoppers. “The trouble is once they get a jump, everybody matches them,” he said, hence the ever earlier openings.

For the first time, Willowbrook Mall in Wayne is allowing merchants to open at midnight on Thanksgiving. The decision by the Old Navy chain to open its Willowbrook store at midnight prompted the shopping center to allow all other stores to do the same. Thus far, about 20 stores have said they will open at midnight. The mall’s large department stores are sticking to their planned pre-dawn opening hours.

Store openings at 3 and 4 a.m. are designed to lure what retail consultant Jeff Green, chief executive officer of Jeff Green Partners in Phoenix, calls “the power shopper” – people for whom Black Friday bargain-hunting is a sport and who will do anything for a bargain. Kohl’s, for example, is opening at 3 a.m. in a bid to catch the power shoppers before they go to Target or Macy’s, he said.

The downside of the power shopper, Green said, is they are only interested in the best values and it’s hard to tempt them away from the bargains and toward the full-priced merchandise. “So it’s not going to be the high-margin merchandise that’s sold during this time,” he said.

Green said he likes the decision by Wayne-based retailer Toys “R” Us to open at 10 p.m. because it fits into a time when the core Toys “R” Us customer might want to shop. “The kids are put to bed, so it’s a good time to go out, at least for one parent to go out. That’s a great angle. I like that better than the 3-in-the-morning kind of thing,” he said. “Toys ‘R’ Us is really up against the wall with the discount department stores, so they need a leg up.”

Toys “R” Us’ decision to open at 10 p.m. on Thanksgiving reflects the growing realization by retailers that “Thanksgiving is not off-limits the way it used to be,” Davis said. Kmart has been open on Thanksgiving in recent years and Sears stores will be open on the holiday this year. Between 2005 and 2009, the percentage of people who shopped over the Black Friday weekend shopping on Thanksgiving Day rose to 15 percent from 10 percent, according the NRF’s surveys.

Online buying patterns have prompted retailers to try opening on Thanksgiving, or at 3 a.m. on Black Friday. “About four or five years ago, many online retailers tried to one-up the traditional retail community by offering specific Thanksgiving Day sales on their websites,” Davis said. “Retailers took a close look at what online retailers were doing, such as Amazon, and they saw an incredible amount of sales on Thanksgiving. They realized that this is a day where the appetite might be there for shopping. So we started to see some retail stores opening earlier on Black Friday and even on Thanksgiving night.”

Davis said she has not heard of any U.S. malls deciding to open on Thanksgiving, other than outlet malls that have special midnight openings for Black Friday.

Retail analysts and experts say it is difficult to say if having the earliest opening time on Black Friday ultimately boosts a retailer’s bottom line. With an early opening “you get this tremendous rush of people in the early part of the day, and in the afternoon many of the specials go away and the traffic drops down to almost less than a normal day, because they’ve taken all the steam out of it by having everybody in so early,” said Bill Martin, executive vice president of ShopperTrak, a Chicago-based firm that tracks shopper traffic and spending patterns for retailers.

But Martin said experienced retailers know how to maximize their early-bird and door-buster specials. “Retailers plan these things for months. They’re inventoried right. They don’t plan them to lose money,” he said. “If shoppers show up and they can get them to buy a couple of other things, they can grab a bigger share of the holiday wallet early.”

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Jeff Green Partners was founded in May of 2004 in response to a growing demand for a new level of expert consulting services in the retail real estate marketplace. Led by President and CEO Jeff Green, Jeff Green Partners provides a full spectrum of analytical and interpretive services for property owners and developers.